2026 NRI guide to luxury Bangalore property: FEMA rules, PoA, taxes, repatriation, Form 145/146 changes, and the 5 costliest buyer mistakes.
Non-Resident Indians can buy residential and commercial luxury property in Bangalore without RBI approval, funding purchases through NRE, NRO, or FCNR accounts under FEMA general permission (Kalpataru, January 2026; NoBroker NRI Guide, February 2026). Agricultural land, plantation property, and farmhouses cannot be purchased (FEMA Expert, April 2026). Repatriation is capped at USD 1 million per financial year from NRO accounts, with sale proceeds of up to two residential properties repatriable through NRE if originally funded by inward remittance (Assetly, April 2026). Several procedural changes take effect in 2026, including the renaming of Form 15CA/15CB to Form 145/146 from 1 April 2026 (Shahi & Co, 2026) and the removal of the TAN requirement for resident buyers from 1 October 2026 (Assetly, April 2026).
What NRIs can buy: Residential and commercial property, unlimited in number, no RBI approval needed (Kalpataru, January 2026).
What NRIs cannot buy: Agricultural land, plantations, farmhouses (inheritance allowed).
Funding channels: NRE, NRO, FCNR accounts; inward remittance via SWIFT; Indian Rupee home loans with 75-90% LTV (Kalpataru, January 2026).
Repatriation cap: USD 1 million per financial year from NRO; up to two residential properties via NRE route if originally funded by remittance.
2026 rule changes: Form 15CA/15CB renamed Form 145/146 (effective 1 April 2026); TAN removal for resident buyers (effective 1 October 2026); Income Tax Act 2025 replaces 1961 Act from 1 April 2026.
Under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, NRIs and OCIs have general permission to acquire residential and commercial property in India without RBI approval (S Lohia & Associates, January 2026). There is no cap on the number or value of properties that can be acquired (Kalpataru, January 2026).
Agricultural land, plantation property (tea, coffee, rubber estates), and farmhouses cannot be purchased. These can only be inherited or received as permitted gifts, and sale is restricted to resident Indian citizens with non-repatriable proceeds (FEMA Expert, April 2026; Kalpataru, January 2026).
Citizens of 11 neighbouring countries including Pakistan, Bangladesh, China, Sri Lanka, and Nepal are not permitted to buy property in India even if they hold NRI status (S Lohia & Associates, January 2026).
Every NRI purchase must be routed through authorised banking channels. Three account types apply (Kalpataru, January 2026):
NRE (Non-Resident External): Foreign income deposited in INR; fully repatriable, tax-free interest.
NRO (Non-Resident Ordinary): Indian income including rent and sale proceeds; interest taxable at 30% TDS plus surcharge and cess (effective 31.2% to 42.74%); repatriation capped at USD 1 million per financial year.
FCNR (Foreign Currency Non-Resident): Foreign currency deposits in USD, GBP, EUR, JPY, CAD, AUD; fully repatriable on maturity; tax-exempt interest under Section 10(15)(iv)(fa).
Indian Rupee home loans for NRIs typically offer 75% to 90% loan-to-value ratios with 2026 interest rates ranging from 7.10% to 12.50% depending on bank and borrower profile (Kalpataru, January 2026; Global Property Guide citing Clear, February 2026). Cash payments are strictly prohibited under FEMA.
For NRIs unable to attend registration in person, a Power of Attorney (PoA) to a trusted resident Indian allows the representative to sign agreements, loan documents, and registration papers on the owner's behalf (FEMA Expert, April 2026).
A specific PoA naming the exact property and transaction is strongly preferred over a general PoA, which grants broader authority and carries higher fraud risk. The PoA must be executed at the Indian Embassy or Consulate in the NRI's country of residence, attested by the Indian Mission, and registered at the Sub-Registrar's Office in Karnataka on arrival. Embassy attestation timelines typically run 3 to 6 weeks depending on the jurisdiction. Never use a rushed or ambiguously drafted PoA at luxury ticket sizes.
On purchase from a resident seller: Standard purchase transactions do not trigger TDS obligations on the NRI buyer.
On rental income: Tenants must deduct 30% TDS plus surcharge and cess on rental payments to NRI landlords and deposit with the Income Tax Department (NoBroker NRI Guide, February 2026). NRI landlords can claim a 30% standard deduction for maintenance and repair against rental income, plus home loan interest deduction under Section 24.
On eventual sale: Long-term capital gains (property held more than 24 months) are taxed at 12.5% without indexation under Section 112, plus surcharge and cess, for an effective rate of approximately 14% to 23% ( Assetly, April 2026). Short-term gains are taxed at the applicable slab rate.
The 20%-with-indexation option provided to resident sellers under Finance (No. 2) Act 2024 does not extend to NRIs (Assetly, April 2026). NRIs can claim Section 54 exemption by reinvesting gains in another residential property, or Section 54EC by investing in specified bonds within six months.
DTAA treaty benefits can reduce tax outgo further for NRIs in treaty countries such as the US, UK, UAE, Singapore, and Canada.
Repatriation rules are where NRIs most frequently hit procedural walls. Two routes exist:
NRE route: Sale proceeds of up to two residential properties purchased with NRE funds or inward remittance can be fully repatriated, subject to proof of original funding and tax payment (FEMA Expert, April 2026; Assetly, April 2026).
NRO route: Any NRO account funds can be repatriated up to USD 1 million per financial year, including sale proceeds, rental income, and inherited assets, once all taxes are cleared (Kalpataru, January 2026; Assetly, April 2026).
Three documents are mandatory for repatriation above ₹5 lakh (Shahi & Co, 2026):
Form 146 (renamed from 15CB effective 1 April 2026): Chartered Accountant's certificate confirming appropriate taxes paid and FEMA compliance.
Form 145 (renamed from 15CA): NRI remitter's self-declaration filed electronically before bank remittance.
Form A2: FEMA-specific bank application declaring purpose of remittance.
Without all three, the bank's authorised dealer will not process the outward transfer.
Based on patterns observed across NRI luxury transactions in Bangalore:
Rushed or over-broad PoA: Leading to fraud exposure or transactional ambiguity.
Skipping title verification: Ignoring 30-40 year Mother Deed chain at luxury ticket sizes.
Wrong account routing: Funding from NRO when inward remittance via NRE would have preserved repatriation flexibility.
Missing lower-TDS certificate: Paying 20% TDS on gross sale value rather than applying for Form 13 to reduce deduction.
Starting repatriation paperwork late: Form 145/146 certification requires at least 30 days before funds can actually transfer.
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